The Impact Of Liquidity On Profitability Finance Essay

The Impact Of Liquidity On Profitability Finance Essay Padachi observed the trends in working capital management and its impact on performance of a firm. Return on assets and cash conversion cycle was used to measure the firms profitability and efficiency of working capital management respectively. He described that a firm should maintain stability between profitability and liquidity while maintaining its day to day activities. The manager of a business want to maximize firms value by achieving preferred tradeoff between liquidity and profitability of a firm. The results indicated that the more investment in inventories and receivables lower the profitability of a firm. Raheman Nasr (2007) discussed the impact of working capital management on profitability of a firm. They also highlighted that the basic objective of a firm is to maximize profit but maintaining liquidity is also an important objective. There will be a serious problem if firm increase profit at the cost of liquidity. Both objectives are important for the firm. If a firm does not concerned about profit then it cannot survive for a longer period. On the other hand, if a firm does not concern about liquidity it may face bankruptcy. They took 94 firms of Pakistan and analyzed that there is a negative relationship between liquidity and profitability of a firm. Michalski (2008) empirically analyzed the relationship between firms policy regarding net working investment and firms profitability. Too low liquidity level may come up problems with timely reimbursement of its liabilities while surplus liquid assets would negatively affect firms profitability. He discussed that decisions regarding liquidity is very difficult, a firm has to choose one of the three policies: first an aggressive policy i.e. a large part of the firms fixed and volatile demand to finance fixed assets is supported with short term financing, second a moderate policy i.e. a fixed part of current assets is financed with long term funds and volatile part is financed with short term funds lastly a conservative policy i.e. both fixed and volatile parts of current assets are financed with long term funds. Dash Hanuman (2009) were concerned about working capital management and they analyzed the liquidity-profitability trade-off model named as goal programming model. They supported that proper flow of fund is needed to run any business. A firm has conflicting objectives regarding liquidity and profitability so the goal programming model determines how targeted levels of profitability and liquidity would be achieved by maintaining current and fixed assets and at the same time minimizing opportunity cost. Their model proposed that working capital and inventory must be streamlined to profitability. Nazir Afza (2009) tried to find out the relation between aggressive working capital management policy and firms profitability by using panel data regression model and Tobins q of 204 Pakistani companies for the period of 1998-2005. They claimed that investors give importance to stocks of those firms which adopt aggressive policies to manage current liabilities. Their findings suggested that aggressive working capital investment and financing policies and profitability are negatively associated. They claimed that investors consider that firms which have less long term loans and equity can have better performance than the others. Burtescu (2010) documented the reflection of liquidity and profitability of a company in the accounting result. He emphasized that it is not adequate for a firm to follow only economic indicators but it is also essential for a firm to make sure its liquidity in its quality of a specific dimension of financial management. The information about solvency and liquidity are beneficial for a firm to predict the ability of a firm to fulfill its financial obligations. He argued that investors have a great concern about the cash flow of a company and it becomes obligatory for a firm to include cash flow statement in its annual financial statements. Gill, Biger Mathur (2010) attempted to examine the relationship between working capital management and profitability. They used sample of 88 firms listed on New York Stock Exchange for the period of 2005-2007. The results suggested that the relationship between cash conversion cycle and gross profit margin is statistically significant. They also concluded that account receivables and profitability are negatively associated. The managers can enhance profits of their company by handling the cash conversion cycle efficiently. Mohamad Saad (2010) attempted to scrutinize the impact of working capital management on profitability and market valuation of a firm. They analyzed the secondary data of 172 Malaysian companies for the period of 2000-2007. They took working capital variables such as cash conversion cycle, current ratio, debt to asset ratio, current asset to total asset, current liabilities to total asset and profitability variables are return on asset and return on invested capital. By using multiple regression analysis and correlation, their results revealed that working capital variables have negative association with firms profitability. Firms cannot exist without working capital and it can improve the profitability and market value of a firm. Dong Su (2010) also conducted a study to find out the relationship between working capital management and firms profitability. The working capital management has an important part in the success and failure of a firm because it has a great impact on the profitability and liquidity of a firm. Their sample is based on 130 firms which are listed in Vietnam stock market for the period of 2006-2008. Their findings proved that profitability and cash conversion cycle is strongly negatively associated. By optimum working capital management, the managers may create a value of stock for the shareholders. The firm should maintain a balance between its two objectives; profitability and liquidity. One objective should not be achieved at the cost of other. Their findings also suggested that profitability can be increased by decreasing the number of days accounts receivable and inventories. Saleem Rehman (2011) observed a significant relationship between liquidity and firms performance. Liquidity of a company is very important for its every stack holder. If a firms cash and near cash assets are insufficient to satisfy its immediate payment obligations than firm may face difficulties. This can affect firms day to day business operations and profitability. They evaluated that liquidity and profitability are inversely related, one increases the other will decreases. Bhunia, Khan Mukhuti (2011) provided the evidence with respect to the relationship between liquidity and profitability of a firm. They took steel companies of private sector in India to assess the management of liquidity as a factor of performance. They studied important liquidity indicators and analyzed that optimal working capital management can be achieved by controlling the trade-off between profitability and liquidity of a firm. Firm value is positively affected by optimal working capital management so the investment in working capital must be satisfactory. They concluded that liquidity and profitability are significantly positively associated. Saghir, Hashmi Hussain (2011) studied the relationship between working capital management and profitability of a firm. They used cash conversion cycle to measure working capital management efficiency and return on asset to measure profitability while analyzing the financial data of 60 textile firms listed on KSE for the period of 2001 to 2006. They suggested that smooth inflow of profit is mainly affected by the optimum point of working capital. Working capital means companys current assets and it has a direct effect on the liquidity and profitability of a firm. According to the risk and return theory, when firms liquidity of working capital is high then it has low risk and low profitability and vice versa. The shorter cash conversion cycle is better for the firm profitability. Their result shows the negative relation between working capital management and profitability of a firm. Alipour (2011) researched about working capital management and corporate profitability while taking sample of 1063 companies from Tehran stock exchange. To test the hypothesis, multiple regression and pearsons correlation was used. He analyzed that sale and profit of a company is greatly influenced by the working capital management. Due to inefficient working capital management, a company may be incapable to pay its debts on time. The results show a significant relationship between working capital management and profitability of a company. There is a negative relationship between cash conversion cycle, average collection period, inventory turnover in days and profitability. Qazi et al. (2011) examined the impact of working capital on the profitability of a firm. Using the financial data of Pakistani automobile and oil and gas industry for the time period of 2004-2009, he proposed that the important components of working capital are debtor, creditor and inventory. The efficient and effective working capital can create value of the shares to shareholders. He persuaded that maintaining the companys liquid level is a major task of a company. So, by ignoring liquidity objective, company may face insolvency or bankruptcy. Their results showed the positive impact of working capital on profitability. Ching, Novazzi Gerab (2011) scrutinized the financial statements of two separate groups of companies: working capital intensive and fixed capital intensive having16 companies in each group listed on Brazil Stock exchange during 2005-2009. They used return on assets, returns on sales and returns on equity to measure profitability and cash conversion cycle, debt ratio, days receivables, days inventory and days of working capital are used as independent variables. Their results showed that managing working capital is very important for both type of companies. Moreover, working capital intensive type of company gets more profit by managing inventory and cash conversion efficiency at optimum level and fixed capital intensive type of company yield more profit through other two variables. Karaduman et al. (2011) also investigated the link between management of working capital and profitability of a firm. In the recent economic conditions, the survival of a firm greatly depends upon the ability to manage its financial function. Their sample is based on 127 companies listed in the Istanbul Stock Exchange during 2005-2009. The cash conversion cycle was used as a proxy of working capital management and returns on assets was used to measure profitability. The results portrayed that ROA is positively affected by the reduction in CCC. The profitability is increased by developing efficiency of working capital. Alam et al. (2011) studied the influence of working capital management on the profitability and its market value of firms which are listed on Karachi stock exchange. They claimed that a misconception that firm survival is based on its profits has been cleared due to the present liquidity crises. They used financial data of 65 companies listed on Karachi Stock exchange during 2005-2009. Return on assets and returns on invested capital were used as proxy for measuring financial performance of the firm, Tobins Q was used to determine the market value of a firm and five financial ratios such as cash conversion cycle, current ratio, debt to asset ratio, current asset to total asset ratio and current liabilities to total asset ratio were used as dependent variables. Their empirical results presented sufficient evidence that firms strongly depends upon current assets to generate profits. Ogundipe, Idowu Ogundipe (2012) provided evidence regarding the influence of working capital management on performance of a firm and its market value. They collected data from annual reports of 54 Nigerian companies for the period of 1995-2009. They explained working capital management as management of current assets and current liabilities and it has a direct effect on firms profitability and market valuation. Their findings suggested that as cash conversion cycle decreases firms profitability increases and efficient working capital management also increases the market value of a firm. Barine (2012) established the relationship between efficient working capital management and firms profitability. Working capital management ensures a firms ability to satisfy both short term obligations and forthcoming operational expenses. They compared the cost and returns of working capital of 22 listed firms on Nigerian stock exchange. Their findings proposed that if cost of working capital is greater than returns on working capital investment then it negatively affects profitability and firms should have optimized working capital investments to stay away from over or under investments. Bhunia (2012) explored the influence of liquidity on profitability while taking the sample of FMCG companies in India during 2001 to 2010. He argued that working capital management plays an important role in the financial management decisions of a firm and managers should manage the trade-off between liquidity and profitability to attain optimal working capital management as it can create value for the firm. By using applied normality test, correlation and regression, the results indicated that liquidity and profitability are positively associated. The research of Vahid, Mohsen and Mohammadreza (2012) also highlighted the affect of working capital management policies on firms profitability. They explained that working capital management has a great impact on profitability and liquidity of a firm and it is responsible for the success and failure of a firm. Their sample consists of 28 Iranian companies listed on Tehran stock exchange for 2005-2009. Their results suggested that conservative investment policy i.e. high level of short term investment have a negative impact on profitability and value of a firm, while aggressive investment policy i.e. long term investment have positive impact on profitability and value of a firm. Their results also showed that aggressive financing policies i.e. high level of current liabilities to finance firms project have a negative impact on profitability and value of a firm, while conservative financing policies i.e. having more long term liabilities to finance firms operating activities have a po sitive impact on firms profitability and value. Al-Mwalla (2012) tried to observe the affect of working capital management policies on the profitability and value of a firm. He persuaded that a firm has to maintain adequate level of working capital to fulfill its short term obligations. Therefore, a firm can adopt one of the two policies; a conservative policy by maintaining low level of current assets to total assets or an aggressive policy by keeping high level of current liabilities to total liabilities. He took annual data of 57 firms listed in Amman Stock Market during 2001 to 2009 for analysis. The results portrayed that conservative policy of investment and financing are positively associated with profitability and value of a firm. Ahmad (2012) highlighted the influence of working capital management on forms performance while taking a sample of 253 companies related to non financial sector listed on Karachi Stock Exchange, Pakistan. He use ROA and ROE as proxy of firm performance and current asset over total sales, current asset over total asset, debtors turnover, current ratio and inventory turnover as proxies of working capital management. Using OLS regression, Pearson correlation analysis and logistic regression techniques, he found that all explanatory variables are positively correlated to firm performance except current assets to total sales as it has a negative correlation with firm performance. Usama (2012) extended the work of Rehman and Nasar regarding working capital management while taking the sample of 18 companies from other food sector listed on Karachi Stock Exchange for the period of 2006-2010. The researcher used different variables to measure working capital management such as average collection period, inventory turnover in days, cash conversion cycle, average payment period, debt ratio, firm size, current ratio, and financial asset to total asset. Using common effect model and pooled least square regression, the results indicated that working capital management has significant positive association with firms profitability and liquidity. He also concluded that firm size and minimum inventory turnover in days has positive influence on firms profitability. Myers (2001) purported that there is no general theory regarding debt and equity choice. He discussed three main theories for the choice of debt and equity. He described that according to trade off theory firms adopt that debt level which balances the tax benefits of additional debt against the cost of financial distress. Debt financing gives a tax shield to a firm therefore they took high level of debt to gain maximum tax benefits and eventually increase profitability. However, the increase of debt financing increases the possibility of bankruptcy. According to pecking order theory, when firms internal cash flow is not enough to fulfill its capital expenditure then firms prefer debt on equity. Mostly low profitable firms entail external financing and accumulate debt. According to the free cash flow theory, when a mature firm has profitable investment opportunities and its operating cash flow is considerably exceeds its investment opportunities, so this dangerous level of debt will h ave a positive effect on firms value regardless of threat of financial distress. Berger Bonaccorsi di Patti (2003) supported that leverage has a direct impact on agency cost which influences firm performance. They proposed that high leverage or a low equity capital ratio causes to reduce the agency cost related to outside equity and raises firm value. They used annual information of U.S. commercial banks from 1990 to 1995. Their result showed that a 1% increase in leverage decrease equity capital ratio surrenders a predicted 6% increase in profit efficiency. Fama French (2005) described the financing decisions of firms. They tested predictions of pecking order theory about financing decisions and claimed that more than half of their sample firms defy the pecking order predictions. Their first result is against the pecking order prediction that firms hardly issue stock. Under their sample, 67% of the firms issue stock each year during 1973-1982 and it rises to 74% for 1983-1992, and 86% during 1993-2002. So, equity decisions of a firm frequently violate the pecking order. Second prediction is that capital structure of a firm is derived by asymmetric information problem but their findings are against this prediction. They suggested that this problem can be avoided by issuing equity through different ways. Elsas, Flannery Garfinkel (2006) studied firm major investment, financing decisions and long run performance. They took 1,185 U.S. firms which made huge acquisitions or capital expenditures during 1989-1999. They observed that large firms financed their new investment with debt whereas equity has a small role. With the passage of time, new debt replaced with equity funds. Small firms mostly rely on issuing equity when financing its new investments to replace debt while internal cash flow is used by medium sized firms. They analyzed that debt financing produces negative long run performance more than equity financing whereas financing with internal funds never produce important share underperformance. Dittmar Thakor (2007) developed a new theory of issuance of security that is when stock prices are high then firms issue equity. This issue is contradictory with the two major theories of capital structure: pecking order and trade off theory. The main idea of their theory is that managers decision about security issuance is based on how their decisions will influence the investment choice of the firm and how this choice will influence the post-investment stock price of the firm. After the investment in the project, managers are more concerned about the stock price and the long term equity value of the firm. The shareholders and bondholders may object to the managers choice of investment because they have dissimilar beliefs regarding the value of the project. Their findings suggest that firms which issue equity have higher stock prices, higher values of agreement parameter and higher increase in investments.

Lego in China

3. ECONOMIC China has several factors that contribute in strengthening their economic position. One of the contributors is their government policy. ‘Chinese government has stressed the importance of develop IT sector to the whole economic development of the country, with considerable commitments to massive investments in infrastructure positive effects of IT on its economic development’ stated by (Li, n. d. ). With more advanced IT departments, China is able to attract more investments from foreigners.Not only that, China also created flexible investors policies. With developed IT structure and a supporting policy, Lego will have no trouble penetrating China’s market. China was known as the most populated place on Earth, hence creating a high demand for products available in market. This will keep the market activity going, given that there is enough supply for everyone. Hoshiko (2011) demonstrated that ‘Cheap labor rates are the keystone to the Chinese econ omic boom’. With a population above 1. 2 billion, labor isn’t one of their main concerns.With low cost of labor, production cost will also drop, this enable them to produce inexpensive goods. If Lego decided to enter China’s market, they will also gain this advantage; they’ll be able to produce their products at a lower cost. Bradsher (2012) has written that ‘China’s exports to all countries rose 9. 9 percent in September from a year earlier, led by especially strong exports to Southeast Asia’. All of these factors in the end helps China’s economic activity, and making it more appealing for investors to come in and plant their money inside of China. The government said Tuesday that it planned to nurture as many as 50 state-owned enterprises to become globally competitive companies while maintaining control of companies engaged in key industries’ (Anon. , 2006). We can see what the government is doing here, they are trying to nurture their companies to complete globally, and giving less concern in internal competition. But global companies have started coming in and practiced the same thing too. Lego may do the same as well; it will give them a new experience curve to see how they should run their business in China.Even though the specific strategy might not be the same in any other country, but Lego will be able to realize what are the steps and actions needed to succeed in foreign areas. Knudstorp (2012) as cited in Hansegard (2012) ‘We're seeing growth in most Asian markets ‘. Recent findings have found that Lego’s sales have been increasing in Asian countries, why? ‘Disposable incomes in China have been growing faster than GDP growth, making toys more affordable for parents and children. ’ (Anon. , 2012). Take as an example China; the people have more disposable income to be spent on their children.Moreover due to the baby-boomer the generation of China, there are a lot of parents now, and now with China’s one child Policy parents are more willing to spend for their loved ones. 4. CULTURE Chinese culture is not as interchangeable, the people held on to it and still respects it as we speaking, and they respect relationship, ranking and protocols. Saying ‘no’ isn’t as easy as it looks like in the Chinese culture, because they believe to deny someone would cause both parties to be embarrassed causing a loss of face. Kjerulf (2010) ‘The Culture in Denmark tends towards the individualistic rather than collective and is very feminine’.We can see there is a difference between Lego and the Chinese culture. We can directly tell, Chinese people are higher in power distance; they call others by their title and last name. Also the Chinese are very more likely to be collectivist, actions that they decided are for the greater good of their people. Lego is very flexible in case of their products itself by having a lot of product lines. With a lot of movie based product lines, such as Indiana Jones, Lego is able to market and alternate their products according to other cultural preference.We found a difference in between China’s Lego official website with the other such as US, Lego in China had excluded the Monster Fighters edition. This can be understood, judging that Chinese people are not that keen on all these western monster theme and Halloween. So Lego figured they would rather not produce this product line, and focus on the others. If Lego had made an investment in Xiamen China, there should not be any problem. To begin with the Chinese people are more uptight towards ranking, and collectivist. While the employer has more of a flexible style, which gives the employees a new working experience and probably a better one.Reference: Home Www1. american. edu (2002) Home. [online] Available at: http://www1. american. edu/initeb/fl9577a/IT%20S;W. htm [Accessed: 5 Nov 2012]. China’s Strengths and Weaknesses 101 | Center for American Progress Americanprogress. org (2011) China’s Strengths and Weaknesses 101 | Center for American Progress. [online] Available at: http://www. americanprogress. org/issues/china/report/2011/02/08/9074/chinas-strengths-and-weaknesses-101/ [Accessed: 5 Nov 2012]. China Exports Rise, Hinting at a Glimmer of a Revival – NYTimes. com BRADSHER, K. 2012) China Exports Rise, Hinting at a Glimmer of a Revival – NYTimes. com. [online] Available at: http://www. nytimes. com/2012/10/14/business/global/china-exports-rise-hinting-at-a-glimmer-of-revival. html? _r=0 [Accessed: 7 Nov 2012]. China to nurture companies for global competition – Business – International Herald Tribune – The New York Times Nytimes. com (2006) China to nurture companies for global competition – Business – International Herald Tribune – The New York Times. [online] Available at: http://www. nytimes. com/2006/12 /19/business/worldbusiness/19iht-nurture. 3951635. tml [Accessed: 7 Nov 2012]. Lego Chief Sees Weak – WSJ. com Online. wsj. com (2012) Lego Chief Sees Weak – WSJ. com. [online] Available at: http://online. wsj. com/article/SB10000872396390444914904577622962273573438. html [Accessed: 7 Nov 2012]. Toys and Games Market Research, Analysis, and Commentary Blog. euromonitor. com (2012) Toys and Games Market Research, Analysis, and Commentary. [online] Available at: http://blog. euromonitor. com/toys-and-games/ [Accessed: 7 Nov 2012]. Business Communication Styles in China and Successful Communication with Chinese Businesses and Colleagues :: World Business Culture

Role Of Strategic Human Resource Management - 1916 Words

Introduction As human resource (HR) management started to replace personnel management to become one of the important inter-functions of the organization, some people may question what make this subcategory of management has important impact on the operation of organisation. Then started to research the strategic value of human resources. Hendry and Pettgrew (1986, cited in Storey, 2007) define that strategic human resource management (SHRM) is a usage of planning consistent HR practices or policies that align with strategy of the organisations to create sustainable competitive advantages (SCA). There are three main approaches in SHRM, which are the best practice (universalist), the best-fit (contingency) and the resource-based. Below this article will briefly introduces theses three approaches, and critically analyse the limitation of these approaches. The Best Practice Approach The assumption underlies in this approach is that there are some ‘best’ human resource practices, which can universally apply to any organisations and will lead to the improvement of organisational performance, such as improvement in employees’ attitudes and productivity (Beardwell Claydon, 2010:57; Purcell, 2001:60). It is a unitary perspective that assumes all employees would pursue the goals generated by organisations (Wilton, 2010: 278). One of the most well-known models is Pfeffer’s (1994,1998, cited in Beardwell Claydon, 2010:57) ‘putting people first’, which identify seven HR practicesShow MoreRelatedStrategic Role Of Human Resource Management1550 Words   |  7 Pagesincreasing competitive environment organisation needs to focus on the value of investing human resources as a major competitive advantage. It is important to set a HRM to meet those advantages to meet company’s objectives with the flexible environment. 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Gannon Oxford School of Hospitality Management, Faculty of Business, Oxford Brookes University, Oxford, UK The role of strategic groups 513 Liz Doherty Business School, Shefï ¬ eld Hallam University, Shefï ¬ eld, UK, and Angela Roper School of Hospitality Tourism Management, University of Surrey, Guildford, UK Abstract Purpose – This articleRead MoreA STUDY ON STRATEGIC ROLE OF HUMAN RESOURCE MANAGEMENT Essay1679 Words   |  7 Pagesï » ¿PREFACE Strategic management is the management of change involving the system of corporate values, the corporate culture, and all managerial process of change, such as leadership, planning, control, and human resources management. The strategic management process represents a logical, systematic, and objective approach for determining an enterprises future direction. 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William Blake s Poem, The Divine Image And The Human...

Over time, man Christians who have a firm foundation in the Bible begin to develop and express their own theories. William Blake was one of these people. While he wrote many things, the poems â€Å"the Divine Image† and â€Å"the Human Abstract† from his books Songs of Innocence and of Experience hit on a deeper level inside of Christianity. When reading the works of others it is important to know what the actual gospel truth is and then what the poet’s truth is. These lines are blurred in these two poems. If a Christian is able to distinguish the God spoken truth from Blake’s own belief’s then these poems provide the reader with a short pastoral message on God and who people are. When properly read and cross-referenced with the Bible, these two poems can provide both comfort and guidance, as well as a warning, to its Christian readers. Whenever a Christian reads a literary work it is important to understand why the author was writing and what their point was. David Jeffery, in his book on Christianity and Literature said that if what is taught in the Bible is Relevant or â€Å"true† to a topic, it is important to understand and value the Bible’s teachings on the subject (8). Alexander Gilchrist, most known for his biography on Blake explained that Blake neither wrote nor drew for the many, hardly for work’s-day men at all, rather for children and angels; himself a divine child, whose playthings were sun, moon, and stars, the heavens and the earth (PoetryFoundation). Blake was aShow MoreRelatedThe Human Abstract Essay1196 Words   |  5 PagesThe Human Abstract The Human Abstract has not received much critical attention on its own. Of the critical interpretations that do exist, many approach the poem by examining its various manifestations in Blakes manuscripts, reading it against A Divine Image, a poem w hich was never finally published by Blake, or comparing it to its Innocence counterpart, The Divine Image. Most critics seem to agree that The Human Abstract represents a philosophical turning point in The Songs of InnocenceRead MoreWilliam Blake And The Divine Image Essay2209 Words   |  9 PagesWilliam Blake, a transitional figure in British literature, was the first romantic poet to focus on content instead of form. Blake is one of the great mystics of the world, like Henry More and Wordsworth; he lived in a world of glory, of spirit and of vision, which, for him, was the only real world. His devotion to God expresses through his lyrical poetry collection Songs of Innocence and Songs of Experience. This collection contains 51 poems wh ere the poems of Innocence are counter part of the poemsRead MoreWilliam Black - I Heard an Angel Singing1404 Words   |  6 PagesWILLIAM BLAKE â€Å"I heard an angel singing† A Matter of Life an Death Abstract In this poem William Blake at the beginning speaks about an angel, who was singing in the small hours every day. An angel was singing all day about mercy, pity, peace, which is the world ´s release. Angel was positive feature. He tried to help people. His voice is really beautiful and people feel good during his singing. Devil cursed mercy, pity and peace, because he saw all men are happy in the world and they don ´tRead MoreAN ANALYSIS OF WILLIAM BLAKES SONGS2960 Words   |  12 PagesAN ANALYSIS OF WILLIAM BLAKE’S SONGS OF INNOCENCE AND OF EXPERIENCE AS A RESPONSE TO THE COLLAPSE OF VALUES TIMOTHY VINESâˆâ€" Blake’s Songs of Innocence and of Experience are a much studied part of the English canon, and for good reason. Blake’s work depicts a quandary that continues to haunt humanity today: the struggle of high-order humanity against the ‘real’ rationality and morals of institutionalised society. This essay seeks to explore both Blake’s literary reaction to the Enlightenment and theRead MoreAnalysis Of The Songs Of Innocence By William Blake1787 Words   |  8 PagesWilliam Blake, an unconventional writer and artist in Romantic England, was known best for his unique printing method and claim to supernatural visions. In 1789, Blake published the â€Å"Songs of Innocence,† a collection of poems attributed with an innocent, romantic viewpoint, as the title indicates. One of the poems, â€Å"The Divine Image,† was used to identify the nature of God in man. â€Å"The Divine Image† speaker identifies the Mercy, Love, Peace, and Pity found in humans to be truly divine and of GodRead MoreThe Romantic Movement Of William Wordsworth And Samuel Taylor Coleridge Essay1427 Words   |  6 Pagesof poetry by conveying nature in their writings. Nature is considered an authoritative characteristic that motivates poets to write subjective poems that reflect on solidity and God. William Blake, William Wordsworth and Samuel Taylor Coleridge were amongst the Romantic poets who published revolutionary Lyrical Ballads that illustrate the association of human relationships with nature (ADD CITE). According to (ADD SOURCE HERE), these famous poets were categorized by the transformation in their themeRead MoreEssay about The Representation of the Female in William Blake1921 Words   |  8 PagesRepresentation of the Female in William Blake If William Blake was, as Northrop Frye described him in his prominent book Fearful Symmetry, a mystic enraptured with incommunicable visions, standing apart, a lonely and isolated figure, out of touch with his own age and without influence on the following one (3), time has proved to be the visionarys most celebrated ally, making him one of the most frequently written about poets of the English language. William Blake has become, in a sense,Read MoreWho Goes with Fergus11452 Words   |  46 PagesWho Goes With Fergus This poem is about the dichotomy of the thinker and the actor. Yeats, in love with Maud Gonne, was the thinker, the courtly lover -- the one who would brood upon loves bitter mystery. Yeats was Mr. Nice Guy. Yet Yeats wanted to be the actor - the alpha male - the Fergus. Note the sexualized subtext that permeates the poem, who will pierce the deep woods woven shade? Who will drive with Fergus. Finally, we get the reasons to be the alpha male - the man of action, in theRead Morewisdom,humor and faith19596 Words   |  79 Pageshumor. Genuine humor is replete with wisdom.† Mark Twain, quoted in Opie Percival Read, Mark Twain and I (1940), 17. â€Å"Humor offers both a form of wisdom and a means of survival in a threatening world. It demands that we reckon with the realities of human nature and the world without falling into grimness and despair.† Roger Shattuck, The Banquet Years: The Origins of the Avant-Garde in France—1885 to World War I, rev. ed. (1968), 248. â€Å"Humor is, in fact, a prelude to faith; and laughter is theRead MoreANALIZ TEXT INTERPRETATION AND ANALYSIS28843 Words   |  116 Pagesstory â€Å"To Build a Fire† or Ernest Hemingway’s â€Å"The Old Man and the Sea†) or between man and society (as in Richard Wright’s â€Å"The Man Who Was Almost a Man†). It may also take the form of an opposition between man and man (between the protagonist and a human adversary, the antagonist), as, for example, in most detective fiction. Internal conflict, on the other hand, is confined to the protagonist. In this case, the opposition is between two or more elements within the protagonist’s own character, as in

The Between Religion And Science - 1651 Words

In Apocalyptic Science Fiction, a major theme is the relationship between Religion and Science. Technology being like a religion is able to infer consequences that by being so consumed by it or self-dependent on it, that it can in fact negatively affect spirit or ethics. A work of Science Fiction has the capability to translate concerns that are religious or spiritual. The Machine Stops, Do Androids Dream of Electric Sheep?, and Blade Runner all translate concerns that relate to religion and technology and how they demand a enormous dependence on them to live day to day. There is an implied dependence on a technological system or appliance that is equal to dependence on religion. The machines used for technology, are worshipped in similar†¦show more content†¦Much like how fear is instilled in people of Catholic religion of not upholding regular church services, or saying the Lord’s name in vain for fear of going to hell. The character, Vashti, believes the Book as be ing the true guide of life and follows all its teachings. Even Kuno believes that she is in denial because she is in fact worshiping the machine and not admitting so. She states the need for the Book, saying â€Å"all the fear and the superstition that existed once have been destroyed by the Machine†¦ The Book says so† (Forster 10). Her existence is ruled by the Book and the systems that respond to Vashti’s needs, on both a physical and non-physical basis. She evangelizes the existence of the Machine to the existence of the Divine. This is quite similar to how people of catholic religion, or Judaism, submit themselves to religion and let it rule their lives. In the novel, Do Androids Dream of Electric Sheep?, animals are worshiped, as they had become a rarity due to nuclear war destroying the planet, along with most of its other lifeforms. This is in parallel to Hinduism; which deems animals, such as cows, as being very sacred and to be worshipped for the gifts th ey bring human life. In Blade Runner, the characters in the film parallel biblical characters. Eldon Tyrell is cast in the part of â€Å"God,† as he created the Replicants. The four Replicants that Deckard hunts down in the file are Roy, Pris, Zora and Leon, which act as

The Hunters Moonsong Chapter Thirty-Nine Free Essays

Stefan hadn’t had a plan when he agreed to stay in Matt’s place. He just knew he had to save Matt, and now he hoped Damon would come for him. Stefan’s wrists ached with a dul , throbbing insistent pain that was almost impossible for him to ignore. We will write a custom essay sample on The Hunters: Moonsong Chapter Thirty-Nine or any similar topic only for you Order Now He tried once more to pul against the ropes that were holding him to the chair, turning his hands from left to right as far as he could to try and loosen his restraints, but it was hopeless. He couldn’t shift them. He looked around dazedly. The room looked both serene and mysterious again now, as it had when he first kicked in the door. A good place for a secret society. Torches burned brightly, flowers were arranged around the makeshift altar. The Vitales had taken the time to clean up after binding him and kil ing the pledges. The ropes were crossed over his chest and stomach and wound around his back; his ankles and knees were tied to the chair legs, his elbows and wrists to the arms of the chair. He was Welltrussed, but it was the ones around his wrists that hurt most, because they lay against his bare skin. And they burned. â€Å"They’re soaked in vervain so that you’l be too weak to break free, but I’m afraid it must sting a bit,† Ethan said pleasantly, as if he was explaining an interesting element of the secret chamber’s architecture to his guest. â€Å"See, I may be new at this, but I know al the tricks.† Stefan rested his head against the back of the chair and looked at Ethan with fervent dislike. â€Å"Not all of the tricks, I suspect.† Ethan was cocky, but Stefan was pretty sure he hadn’t been a vampire for very long. If Ethan was stil human, if he had never become a vampire, Stefan guessed he would look more or less the same as he did now. Ethan crouched down in front of Stefan’s chair to look up into his face, wearing the same warm, friendly smile as when he’d tried to convince Stefan to join them. He looked like a pleasant fel ow, someone you wanted to relax with and trust, and Stefan glared at him. The smile was a lie. Ethan was a kil er whose mask was less obvious than those of the other Vitale vampires, that was al . â€Å"You’re probably right about that,† Ethan said thoughtful y. â€Å"I imagine there are al kinds of tricks you’ve picked up in, what is it, more than five hundred years? Tricks that I don’t know yet. You could be very useful to me in that way, if you decide to join us after al . There are lots of things you can teach us about al this vampire stuff.† He flashed that appealing smile again. â€Å"I’ve always been a good student.† Vampire stuff. â€Å"What do you want from me, Ethan?† Stefan asked wearily. It had been a long night, a long few weeks, and the vervain-soaked ropes were hurting his arms, muddying his thoughts. Ethan knew how old he was. Ethan knew what to offer him when they first talked about the Vitale Society. It wasn’t a coincidence that he was the one in this room, then; Ethan wasn’t looking for just any vampire. â€Å"What’s your plan here?† Stefan asked. Ethan’s smile grew wider. â€Å"I’m building an invincible vampire army, of course,† he said cheerful y. â€Å"I know it sounds a little ridiculous, but it’s al about power. And power’s never ridiculous.† He licked his lips nervously, showing a flash of thin pink tongue. â€Å"See, I used to just be one of the ordinary little people. I was just like everyone else on campus. My biggest achievements were good grades on exams or the fact that I had the leadership of some secret col ege club. You wouldn’t believe how lame the Vitale Society used to be. Just white magic and nature worship.† He made a little self-deprecating grimace: See how silly I was once. I’m telling you something embarrassing about myself, so trust me. â€Å"But then I figured out how to get some real power.† One of the black-clad figures came up behind Ethan, and Ethan held up a finger to Stefan. â€Å"Hang on a sec, okay?† He rose and turned to talk to his lieutenant. After tying Stefan up, Ethan had efficiently gone back to draining the pledges, one after another, dropping the bodies as soon as he finished with them. They had al gone through their transitions now and were back on their feet. They seemed irritable and disoriented, growling and snapping at one another and gazing at Ethan with undisguised adoration. Typical new vampires. Stefan eyed them warily. Until they had fed thoroughly, they would hover on the brink of madness, and it would be easy for Ethan to lose control of them. Then they would be even more dangerous. â€Å"The pledges need to eat,† Ethan said calmly to the robed woman behind him. â€Å"Five of you should take them out and teach them how to hunt. You lead the hunting party and pick whoever you want to go with you. The rest wil stay here and help guard our guest.† Stefan watched as the Vitales sorted themselves out. Eight of Ethan’s fol owers remained, stationing themselves by the sides of the room. Stefan had managed to kil one other during the fight, ripping her throat out, but the body had been tidied away somewhere. Stefan gave a little involuntary moan. It was hard to think straight – he was so tired, and the vervain was starting to hurt him al over, not just on his aching wrists, but anywhere the ropes touched him through his clothes. Damon, please come quickly. Please, Damon, he thought. â€Å"You’re going to unleash nine newly made vampires on the campus?† he asked Ethan, his mind snapping back to the matter at hand. â€Å"Ethan, they’l kill people. People who were your friends, maybe. You’l draw attention to yourselves. There are already police al over campus. Please, take them to the woods to hunt animals. They can live on animal blood.† He heard a pleading note enter his own voice as Ethan only smiled absently at him, as if he was a child begging to go to Disneyland. â€Å"Come on, Ethan, it hasn’t been very long since you were a human, too. You can’t want to stand by and have innocent students murdered.† Ethan shrugged, patting Stefan lightly on the shoulder as he started to walk over to confer with another of his henchmen. â€Å"They need to be strong, Stefan. I want them at their peak by the next equinox. And we’ve kil ed plenty of innocent students already,† he said over his shoulder. â€Å"Equinox? Ethan,† Stefan shouted after him in frustration. He looked frantical y at the door by which the pledges and their escort had left. It would take them a while to select victims. Not as many students were walking the campus alone at night these days. If he could get free, if Damon came now and freed him, they could stil stop the slaughter. If al these brand-new vampires were al owed loose on campus, there would be a massacre. Ethan couldn’t have changed the rest of the Vitale Society al at once, he realized. The number of murders they would have committed newly made as a group would have been impossible to disguise as a few disappearances. This must have been the first mass initiation. And who had made Ethan? he wondered. Was there an older vampire somewhere on campus? Damon, where are you? He had no doubt that Damon would come if he could. Despite their rift over Elena, things had changed enough between him and Damon that he knew he could rely on his brother to rescue him. He had saved him before, after al , when they fought Katherine, when they fought Klaus. There was something rock solid between them now, something that wasn’t there a year ago, or in the hundreds of years before that. He closed his eyes and heard himself give a dry, painful chuckle. It seemed like an inopportune moment to start having revelations about his own family issues. â€Å"So,† Ethan said chattily, returning to his side and pul ing up a chair, â€Å"we were talking about the equinox.† â€Å"Yes,† Stefan said, an acid bite to his tone. He wasn’t going to let Ethan see how he was yearning toward the door, expectant. He needed to keep his cool, so that Damon could have the element of surprise on his side. He should keep Ethan talking, keep him distracted in case Damon came, so he fixed an expression of interest on his face and looked at Ethan attentively. â€Å"At the time of the equinox, when day and night are perfectly balanced, the line between life and death is at its most weak and permeable. This is the time when spirits can cross between the worlds,† Ethan began dramatical y, moving one hand in a wide sweep. Stefan sighed. â€Å"I know that, Ethan,† he said impatiently. â€Å"Just cut to the chase.† He might have to keep Ethan distracted, but surely he didn’t have to feed his ego. Ethan dropped his hand. â€Å"You remember Klaus, don’t you?† he asked. â€Å"The originator of your bloodline? We’re resurrecting him. With him at the head of our ranks, we’l be invincible.† Everything went stil for a moment, as if Stefan’s slow-beating heart had final y stopped. Then he sucked in a breath. He felt as if Ethan had punched him in the face. He couldn’t speak for a moment. When he could, he gasped, â€Å"Klaus? Klaus the vampire who†¦Ã¢â‚¬  He couldn’t even finish the sentence. His mind was ful of Klaus: the Old One, the Original vampire, the mad man. The vampire who had control ed lightning, who had bragged that he had not been made, that he just was. In Klaus’s earliest memories, he had told Stefan, he carried a bronze axe; he was a barbarian at the gate, among those who destroyed the Roman Empire. He claimed that he began the race of vampires. Klaus had held Elena’s spirit hostage and tortured innocent Vickie Bennett to death for fun. He turned Katherine, first into a vampire, then into a cruel dol instead of a person, changed her until she was vicious and mindless, eager only to torment those she once loved. Stefan, Damon, and Elena kil ed him at last, but it was nearly impossible, would have been impossible without the spirits of a battalion of unquiet ghosts from the Civil War tied to the blood-soaked battlegrounds of Fel ‘s Church. â€Å"Klaus who made the vampire who made you,† Ethan said cheerful y. â€Å"It was another of his descendants who I found in Europe this summer on my trip abroad. I convinced her to turn me into a vampire. She taught me some tricks, too, like how to use vervain, and how lapis lazuli can protect us from the sun. I put lapis lazuli in the pins we wear now, so al the members have it on them at al times. She was very helpful, this vampire who changed me. And she told me al about Klaus.† He smiled warmly at Stefan again. â€Å"See, you should like me, Stefan. We’re practical y cousins.† Stefan shut his eyes for a moment. â€Å"Klaus was insane,† he tried to explain. â€Å"He won’t work with you, he’l destroy you.† Ethan sighed. â€Å"I real y think I can work it out with him, though,† he said. â€Å"I’m very persuasive. And I’m offering him soldiers. I hear he likes war. There’s no reason for him to turn us down; we want to give him everything he wants.† He paused and looked at Stefan, stil smiling, but there was a note now in that wide smile that Stefan didn’t like, a false innocence. Whatever Ethan was going to ask Stefan now, he already knew the answer. â€Å"Does this mean you’re not interested in joining our army, cousin?† he asked with mock surprise. Gritting his teeth, Stefan strained against the ropes once more, but they didn’t budge. He glared up at Ethan. â€Å"I won’t help you,† he said. â€Å"Never.† Ethan came closer, bent down until his face was level with Stefan’s. â€Å"But you wil help,† he said lightly, a trace of self-satisfaction in his eyes. â€Å"Whether you want to or not. See, what I need most of al to bring back Klaus is blood.† He ran his hands through his curls, shaking his head. â€Å"It’s always blood for this kind of thing, have you noticed?† he added. â€Å"Blood?† asked Stefan uneasily. Young vampires were never sane, in his opinion – the initial rush of new senses and Powers were enough to bewilder anyone. He was starting to think, though, that Ethan’s grasp on sanity might not have been that strong to begin with. He’d convinced someone to turn him into a vampire? â€Å"The blood of his descendants, specifical y.† Ethan nodded smugly. â€Å"That’s why I was so delighted to find that you were right here on campus. I made a hobby of tracking down the descendants of Klaus this summer, after I’d talked the first one I met into changing me into what she was. Some of them gave me blood wil ingly, when they heard what I wanted to do. Not al of Klaus’s descendants are as ungrateful as you. I only need a little more, and then I’l have enough. Yours, of course,† and his eyes flicked up toward the door that Stefan had been surreptitiously watching al this time, waiting for Damon, â€Å"and your brother’s. I assume he’l be here any minute?† Stefan’s heart plummeted, and he stared openly at the door. Damon, please stay away, he thought desperately. How to cite The Hunters: Moonsong Chapter Thirty-Nine, Essay examples

Application of Accrual Accounting †Free Samples to Students

Question: Discuss about the Application of Accrual Accounting. Answer: Introduction: The key users of the financial reporting are potential and present investors, creditors and lenders, who make use of this information in making their decisions as to whether they should purchase, hold or sell equity and providing or settling some financial loans. The key statements in an organization are statement of comprehensive income, cash flows statement, balance sheet as well as statement of shareholders equity (White, Braentner Towery, 1993). In this case, this section would concentrate on statement of comprehensive income and would present its purpose to users. Statement of comprehensive income is usually the report an organization financial performance is presented. It helps in providing summary on how an organization incurs sales and expenses via both the non-operating and operating activities. It is usually divided into non-operating as well as the operating section with the operating section disclosing info on proceeds and operating expenses which are openly resulting from organization regular operations (Kakani, Ramachandran Chatterjee, 2010). On the other hand, non-operating portion helps in disclosing revenues and expenses on activities which are not related directly to an organizations operations. Interestingly, the primary users of the financial information are therefore in need of income statement in assessing the organizations prospects for the future net cash inflows and also in assessing how efficiently and effectively management could be discharging their responsibilities in utilizing organizations existing resources (Kothari Ball, 1994). Statement of comprehensive income or the income statement is very important in providing relevant information to different user on financial performance or health of a given firm over a specific accounting period (Zack, 2013). As financial performance is usually concerned with profitability of an organization, users require information on organizations financial performance in order to evaluate probable changes or variation in its economic capital as well as its ability to generate some cash from all its resources. In addition, statement of the comprehensive income is crucial for different user in evaluating how efficient any extra resources could be utilized in an organization. Further, statement of comprehensive income is useful since it displays how much cash an organization made within a defined period. Another purpose of statement of comprehensive income is that the statement helps in determining whether an organizations earning are sufficient in repaying its loans. In addition, statement of comprehensive income is crucial in highlighting some of the weaknesses and strengths in an organization over a given period of time (Kakani, Ramachandran Chatterjee, 2010). Statement of comprehensive income is also crucial since it shows readers and financial users how much loss or profit an entity generated within the reporting period. Such information is crucial when statement of comprehensive income from numerous period are all put together, such that trends in revenue and expenses is viewed. In addition, given that statement of comprehensive income gross profits is usually gotten by netting sales and cost of the goods sold, the information contained in this statement provide a signal of the capacity of the firm in setting price points which clients could easily accept and in maintaining costs of products and services which it offers. Further, statement of comprehensive income is crucial for investors since it help them evaluates the consistency of profit which proves viability of an organization (Kothari Ball, 1994). It is also help lenders in evaluating the probability of an organization to generate adequate income in paying off its interest expenses. Income in the statement of comprehensive income is the total amount received after deducting all the operating expenses, taxes and interest expenses for the financial obligations. In essence, income is the amount of money an organization generates by providing services or selling products. An example of income is the discounts or negotiating rebates with the venders. According to the conceptual framework, income is the increase in the economic benefits within an accounting period in form of the inflows or enhancements of the assets or declines of the liabilities which result in rise in equity, other than the items relating to the contributions from the equity participants. Expenses on the other hand are total amount of expenditures incurred by an organization while conducting its normal production or selling operations (Zack, 2013). This is the total amount of money incurred or spent in an entitys effort for generating expenditures representing cost of conducting a business. These range from salaries of the employees to office suppliers, cost of gods sold to material expenses. They might also be form of cash payment, amount taken from earnings such as bad debts as well as depreciation (Kakani, Ramachandran Chatterjee, 2010). In conclusion, statement of comprehensive income is usually the report an organization financial performance is presented. It helps in providing summary on how an organization incurs sales and expenses via both the non-operating and operating activities. Further, the statement of comprehensive income or the income statement important since it provides relevant information to different user on financial performance or health of a given firm. It is also since it helps in evaluating how efficient any extra resources could be utilized in an organization. In addition, it assists in determining whether an organizations earning are sufficient in repaying its loans. General Purpose of Statement of Financial Position The statement of the financial position is the financial statement that grants financial health or soundness of an organization. It comprises of three primary elements, liabilities, equity and assets. Statement of Financial position is said to be very important since it highlights financial standings of an organization at specific period (Zack, 2013). In addition statement of the financial position comprise of liabilities, equity and assets. This is crucial as it assist users of the financial statement is assessing or evaluating financial healthy or soundness of an organization in terms of financial risk, business risk, liquidity risk as well as credit risk. While assessing or evaluating an organization over a longer period, this statement assists in identification of underlying trends in financial position of an organization (Accounting-simplified.com, 2017). Thus, statement of the financial position is significant for readers in determining state of an organizations level of risk. In addition, when used with other statements, the statement might assist in identifying trends and relationship that are indicative of probable issues or areas that require further improvements. Therefore, statement of financial positions has wide purpose as it assist users in predicting amount volatility and timing of an organizations upcoming incomes. Generally, statement of the financial position is crucial in that it inform readers on the current status of an organization where this information is then utilized in predicting or projecting liquidity, debt position and funding of an organization. Assets are those resources an organization controls or own at a provided period. In addition, assets are resources owned by an organization to assist it in deriving some economic benefits from their use. There are two different types of assets; non-current and current assets. Current assets comprises of cash as well as inventories, cash equivalent, account receivables, as well as the prepaid expenses. These are assets that could deliver economic benefits to an organization within a year. They are those resourced expected to be loaned out, consumed, sold or leased in creating some income within a year of balance sheet date (Kothari Ball, 1994). On the other hand, non-current assets comprises of assets that cannot be easily or quickly transformed into cash. These include property and equipment, land, furniture, vehicles, buildings, fixtures and others. In essence, non-current assets are those assets that deliver economic benefits to a given firm over a long period (White, Braentner T owery, 1993). These are resources not recoverable, meaning that the monetary value of such resources is extracted from these resources is no longer important, till over one year past balance sheet period. These can also be classified as intangible and tangible assets. In this case, those amounts of assets with some physical substances are usually categorized as the plant, property and equipment while those one that do not have physical material are usually categorized as the intangible assets. Liability on the other hand represents the total amount an organization owes others. In essence, liabilities are the financial obligations which an organization owes to other individuals or organizations and its repayment comprises of transfer of the cash or any other resources (Zack, 2013). In this case, liabilities comprise of two main parts; that is, current and non-current liabilities. Current liabilities are those obligations an organization is required to repay within one year which includes note payables, current maturities debts, bank overdraft, account payables and accrued expenses. In essence, these are financial obligations in an organization that could be settled over short-term (Ou Penman, 1989). On the other hand, non-current liabilities are those obligations which become due within one year or more. These include mortgages, long-term note payables, long-term loans, bonds and others. Basically, these are financial obligations that are to be settled over long-term. Equity represents what shareholders or the owner of an organization owns. It is usually a type of liability since it represents finances owned by an organization to owners or shareholders. In essence, equity is the resources an organization owes to owners or shareholders. They are usually derived by subtracting liabilities from its assets. Hence, signifies residual interests in an organization which goes to proprietors. They are usually offered under share capital which presents amount that needs to be reinvested by shareholders in an organization (Sinha, 2012). Secondly, they are presented under retained earnings which comprises of total income in an organization after distribution to owners in dividends. They are also presented as revaluation reserve which comprises of net spare of mounting reassessment of plants, property or equipment recognized straight in equity. Equity for the sole traders is quite different from the limited companies. This is evident by the fact that equity se ction in a sole trader is simple as compared to limited companies. In conclusion, statement of the financial position is the financial statement that presents financial position of a given organization. This statement is found to be very crucial since it highlights financial position of an organization at specific point in time. It is also crucial since it assist users of the financial statement is assessing or evaluating financial healthy or soundness of an organization in terms of financial risk, business risk, liquidity risk as well as credit risk. Thus, it can be concluded that statement of the financial position is significant for readers in determining state of an organizations level of risk. Accrual Basis of Accounting under GAAP GAAP are mainly mutual accounting values, procedures and standards which an organization has to follows whenever they compile the financial reports. It is usually the mixture of the commanding values and generally accepted means of reporting and recording accounting info. It usually improves clarity of communicating financial information (Guthrie, 1998). In addition, GAAP ensure minimum level of consistency in financial statement, which in turn makes it a bit easier for the potential investors to extract and analyse useful financial information (Scott, 1941). With these considerations, there is need to evaluate accrual basis under GAAP and why it takes place. Accrual basis of the accounting is usually the concept or process of recording sales when earned as well as expenses as they are incurred (Roje, 2006). This accounting concept is different from cash basis where revenues are usually recorded whenever cash is received and the total expenses are only recorded once cash has been paid (Lapsley, Mussari Paulsson, 2009). For instance, an organization operating under accrual basis would record its revenues soon as it issues invoice to its clients. Accrual basis is usually advocated under the IFRS and GAAP. Both of these frameworks offer guidelines on how to account for expenses and revenues in absence of cash payment or receipts (Dechow, 1994). In essence, accrual basis offer more even recognition of the expenses and revenues over time, and is therefore considered by potential investor as the most valid accounting concept for ascertaining outcomes of financial position, cash flows and operations of an organization. Basically, accrual basis mainly support matching principles of GAAP under which the related expenses and revenues are recorded within same reporting period, where by it is make possible to view full extent of losses and profit linked with particular organization transaction within a specific reporting period (Blndal, 2003). On the other hand, accrual basis is also said to support revenue recognition principle which state that income statement has to reflect true extent of the revenue earned within the period it is earned irrespective of whether the money from such transaction is received or not. This implies that revenue is recognized only when seller transfer all the risks to the buyer. Further, based on historical cost concept, revenue is based on the past proceedings and it needs consistency as well as comparability which require transaction to be recorded at historical costs. In this case, revenue is not recognized as increase in the asset value except where it is required or allowed by the accounting s tandards. Finally, time period concept principle, revenues are only reported or recognized over standard period of time, which could be monthly, or annually. Once the period has been established, transactions are then recorded within a given or set period. In conclusion, accrual basis usually needs an organization to record all its transactions during the period when a financial event takes place. Therefore, in case GAAP utilized cash accounting, the transactions could not be recorded for some time after a product leaves the inventory. In essence, accrual basis is crucial and thus the reason why GAAP make use of the accrual basis since it provide accurate reporting in between the period. In addition, accrual basis usually carries matching principle in between the expenses and revenues, which is a significant component for the GAAP. References Accounting-simplified.com. 2017, Statement of Financial Position [Balance Sheet]; Viewed at 12th May 2017 from: https://accounting-simplified.com/financial/statements/statement-of-financial-position.html Blndal, J. R. (2003). Accrual accounting and budgeting.OECD Journal on Budgeting,3(1), 43-59. Dechow, P. M. (1994). Accounting earnings and cash flows as measures of firm performance: The role of accounting accruals.Journal of accounting and economics,18(1), 3-42. Guthrie, J. (1998). Application of accrual accounting in the Australian public sectorrhetoric or reality.Financial accountability management,14(1), 1-19. Kakani, R. K., Ramachandran, N., Chatterjee, T. (2010). Financial statement analysis. Kothari, S. P., Ball, R. (1994).Financial statement analysis. Mcgrew-Hill Companies. Lapsley, I., Mussari, R., Paulsson, G. (2009). On the adoption of accrual accounting in the public sector: a self-evident and problematic reform. Ou, J. A., Penman, S. H. (1989). Financial statement analysis and the prediction of stock returns.Journal of accounting and economics,11(4), 295-329. Roje, G. (2006). The role of accrual financial reporting and budgeting basis in public sector financial management reforms: Croatian experience and international trends. In8th AIDEA YOUTH INTERNATIONAL CONFERENCE:; Improving business reporting: new rules, new opportunities, new trends;. Scott, D. R. (1941). The basis for accounting principles.Accounting Review, 341-349. Sinha, G. (2012).Financial statement analysis. PHI Learning Pvt. Ltd.. White, B., Braentner, L., Towery, E. (1993).Financial Statement Analysis. New York: Wiley. Zack, G. M. (2013). Financial Statement Analysis.Financial Statement Fraud: Strategies for Detection and Investigation, 209-213.